1 00:00:00,240 --> 00:00:05,000 Speaker 1: This is Bloomberg Wall Street Week. Market shruggle, higher consumer prizes, 2 00:00:05,040 --> 00:00:07,400 Speaker 1: the economy is in the process of rebounding. Will the 3 00:00:07,480 --> 00:00:10,479 Speaker 1: utter Reserve have its own digital currency? The financial stories 4 00:00:10,520 --> 00:00:12,879 Speaker 1: that cheap hard work. Many people think the eels are 5 00:00:12,880 --> 00:00:15,080 Speaker 1: just going to keep marching up. We have more spending 6 00:00:15,120 --> 00:00:17,200 Speaker 1: coming out of Congress. One of the big questions I 7 00:00:17,200 --> 00:00:19,880 Speaker 1: think on investors minds inflations through the eyes of the 8 00:00:19,920 --> 00:00:23,560 Speaker 1: most influential voices. Larry Summer is the former Treasury Secretary. 9 00:00:23,640 --> 00:00:27,240 Speaker 1: Bryan went An back of America, Will CEO of Charlie Sharp. 10 00:00:27,360 --> 00:00:31,560 Speaker 1: Bloomberg wool Street Week with David Weston from Bloomberg Radio, 11 00:00:32,000 --> 00:00:36,600 Speaker 1: a mega media deal, cryptocurrency crash, and adjusting to a 12 00:00:36,680 --> 00:00:40,240 Speaker 1: world without COVID restriction, leaving investors to sort out this 13 00:00:40,320 --> 00:00:44,160 Speaker 1: signal from the noise. This is Bloomberg Wall Street Week. 14 00:00:44,320 --> 00:00:47,680 Speaker 1: I'm David Weston. There was some true drama this week 15 00:00:47,760 --> 00:00:49,960 Speaker 1: and more than a little bit of excitement as well, 16 00:00:50,000 --> 00:00:51,720 Speaker 1: But in the end, the markets came out of the 17 00:00:51,720 --> 00:00:53,840 Speaker 1: week not all that much different from where they started, 18 00:00:54,080 --> 00:00:56,560 Speaker 1: with the SMP five hundred down just a tad and 19 00:00:56,560 --> 00:00:59,880 Speaker 1: the NASTAC up just a tad, while the tenuere yield 20 00:01:00,040 --> 00:01:02,440 Speaker 1: lost less than a basis point. But what was not 21 00:01:02,640 --> 00:01:05,399 Speaker 1: come this week was Bitcoin. It plunged from a high 22 00:01:05,480 --> 00:01:07,240 Speaker 1: forty four thousand dollars at the beginning of the week 23 00:01:07,280 --> 00:01:09,440 Speaker 1: down to thirty five thousand dollars on Friday, but in 24 00:01:09,440 --> 00:01:11,840 Speaker 1: between were always at a thirty thousand all the way 25 00:01:11,880 --> 00:01:14,080 Speaker 1: up to forty two and as I say, it ended 26 00:01:14,160 --> 00:01:15,840 Speaker 1: up at thirty five thousand at the end of the week. 27 00:01:16,120 --> 00:01:18,640 Speaker 1: It was all exciting to watch, but didn't signify much 28 00:01:18,680 --> 00:01:21,399 Speaker 1: beyond the four corners of crypto land. For that, we 29 00:01:21,480 --> 00:01:24,240 Speaker 1: turned to our regular contributor Gillian Tett of The Financial Times, 30 00:01:24,240 --> 00:01:26,320 Speaker 1: where she is chair of the editorial board and editor 31 00:01:26,360 --> 00:01:29,040 Speaker 1: at large. US great to have you, particularly as you've 32 00:01:29,040 --> 00:01:32,559 Speaker 1: really studied crypto so carefully. Doesn't have any significance beyond 33 00:01:32,680 --> 00:01:36,000 Speaker 1: the four corners of crypto land. Well, here's a good news. 34 00:01:36,160 --> 00:01:38,319 Speaker 1: It doesn't have that much significance because at the end 35 00:01:38,360 --> 00:01:40,360 Speaker 1: of the day it's still is only a two trillion 36 00:01:40,400 --> 00:01:42,880 Speaker 1: dollar market and that is not enough to make it 37 00:01:42,959 --> 00:01:46,840 Speaker 1: truly systemic. Um and we have seen dramatic swings in 38 00:01:46,880 --> 00:01:49,520 Speaker 1: cryptocurrencies before. It's what remembering that you don't have market 39 00:01:49,520 --> 00:01:52,040 Speaker 1: makers in the secretor so of course that tends to 40 00:01:52,080 --> 00:01:53,800 Speaker 1: make it a lot more volatile than most of the 41 00:01:53,840 --> 00:01:57,320 Speaker 1: other types of assets like equities that investors maybe looking at. 42 00:01:57,920 --> 00:02:00,880 Speaker 1: But the bad news is that this does show that 43 00:02:01,000 --> 00:02:04,800 Speaker 1: the foundations of cryptocurrency are a lot shakier that many 44 00:02:04,800 --> 00:02:09,160 Speaker 1: of the enthusiasts have actually factored in before. There's a 45 00:02:09,200 --> 00:02:11,960 Speaker 1: lot of capacity, there's a lot of dependency on what 46 00:02:12,080 --> 00:02:14,400 Speaker 1: stance of regulators are going to take, and we still 47 00:02:14,400 --> 00:02:16,800 Speaker 1: don't really know what stance that's going to be. And 48 00:02:16,880 --> 00:02:20,080 Speaker 1: the other point of make which is really important, is 49 00:02:20,120 --> 00:02:23,360 Speaker 1: that all of this is coming as not only war 50 00:02:23,440 --> 00:02:26,200 Speaker 1: street banks, but big asset managers like Fidelity start to 51 00:02:26,240 --> 00:02:28,880 Speaker 1: move into this land. And of course this week the 52 00:02:28,919 --> 00:02:32,080 Speaker 1: other bit of really big news was that the Federal Reserve, 53 00:02:32,240 --> 00:02:34,920 Speaker 1: along with other central banks, is looking at whether it 54 00:02:34,960 --> 00:02:38,040 Speaker 1: could create a digital currency of its own. So let's 55 00:02:38,080 --> 00:02:40,480 Speaker 1: talk about that. The regulators war less declaring a form 56 00:02:40,480 --> 00:02:43,520 Speaker 1: of war and cryptocurrency. And because you had, as you said, 57 00:02:43,720 --> 00:02:45,880 Speaker 1: the j Pal, the Chairman of the Fed coming out 58 00:02:45,919 --> 00:02:47,679 Speaker 1: saying we're gonna spend the summer studying is We're gonna 59 00:02:47,680 --> 00:02:49,040 Speaker 1: come out with the report exactly what we want to 60 00:02:49,040 --> 00:02:50,800 Speaker 1: do a digital currency. And then you had both the 61 00:02:50,800 --> 00:02:53,840 Speaker 1: PBOC saying, don't you dare trade in this stuffs by 62 00:02:53,880 --> 00:02:56,120 Speaker 1: stuff within in China, and you also had the State 63 00:02:56,120 --> 00:02:58,400 Speaker 1: Council saying, don't even mind it over here. Sounds that 64 00:02:58,440 --> 00:03:01,079 Speaker 1: the regulators are starting to get their dander rob Well, 65 00:03:01,080 --> 00:03:02,680 Speaker 1: there's two or three things go on here. On the 66 00:03:02,680 --> 00:03:06,040 Speaker 1: one hand, that's a regulator thing. Actually, the underlying technology 67 00:03:06,040 --> 00:03:09,880 Speaker 1: of what's going on here, the blockchain is actually potentially 68 00:03:09,960 --> 00:03:12,520 Speaker 1: very useful. But if that is going to be useful, 69 00:03:12,600 --> 00:03:14,919 Speaker 1: we actually want to try and control it some way 70 00:03:14,960 --> 00:03:18,400 Speaker 1: and ensure that money is still tethered to a central bank. 71 00:03:18,960 --> 00:03:21,520 Speaker 1: And one of the biggest risks to the bitcoin and 72 00:03:21,600 --> 00:03:24,160 Speaker 1: other types of tokens going forward is that if the 73 00:03:24,240 --> 00:03:27,320 Speaker 1: central banks ever get serious about creating their own digital currency, 74 00:03:27,680 --> 00:03:30,360 Speaker 1: they could essentially squeeze out a lot of these bottom 75 00:03:30,400 --> 00:03:33,720 Speaker 1: up innovations. At the same time, you're seeing regulators saying 76 00:03:33,800 --> 00:03:36,560 Speaker 1: or we're getting concerned about the tax implications of all this, 77 00:03:37,040 --> 00:03:39,280 Speaker 1: and the i R s indicated they're going to start 78 00:03:39,280 --> 00:03:42,560 Speaker 1: treating bitcoin like any other asset and demanding a lot 79 00:03:42,600 --> 00:03:46,760 Speaker 1: more disclosure, reporting and of course payment of taxes. And 80 00:03:46,800 --> 00:03:49,120 Speaker 1: again it's unclear whether people have factor that in or not. 81 00:03:49,680 --> 00:03:51,800 Speaker 1: And then lots or not. Least you have the regulators 82 00:03:52,000 --> 00:03:55,400 Speaker 1: who are trying to work out how they're going to control, shape, 83 00:03:55,440 --> 00:03:58,800 Speaker 1: monitor define this. Um China said they're going to stop 84 00:03:58,840 --> 00:04:02,560 Speaker 1: their banks essentially d in with this, but another jurisdiction 85 00:04:02,560 --> 00:04:04,360 Speaker 1: to be doing the same. Turkey came in with very 86 00:04:04,400 --> 00:04:07,120 Speaker 1: strong rules quite recently too. But at the heart of 87 00:04:07,160 --> 00:04:09,840 Speaker 1: the regulatory dignamad lemma is a debate going on amongst 88 00:04:09,840 --> 00:04:13,520 Speaker 1: regulated about is this a currency, in which case someone 89 00:04:13,560 --> 00:04:16,160 Speaker 1: like the FRET should be involved, Is it a security 90 00:04:16,440 --> 00:04:18,839 Speaker 1: in which case someone like the SEC should be involved, 91 00:04:19,160 --> 00:04:21,440 Speaker 1: or is it actually a commodity, a store of value 92 00:04:21,560 --> 00:04:24,640 Speaker 1: more like gold, in which case maybe the CFTC should 93 00:04:24,640 --> 00:04:27,040 Speaker 1: be involved. And right now the answer is not clear, 94 00:04:27,120 --> 00:04:29,720 Speaker 1: So there's a lot of uncertainly swirling around the whole 95 00:04:29,760 --> 00:04:32,640 Speaker 1: crypto space. And maybe Jennian, that's another way of asking 96 00:04:32,680 --> 00:04:34,800 Speaker 1: the question that I have, which is what role, if any, 97 00:04:34,960 --> 00:04:37,080 Speaker 1: is this play in the larger financial system. I mean, 98 00:04:37,200 --> 00:04:39,960 Speaker 1: right now, given the volatility, you can't really buy things. 99 00:04:39,960 --> 00:04:43,520 Speaker 1: You can't denominate prices in this as Elon Musk apparently 100 00:04:43,560 --> 00:04:46,600 Speaker 1: has concluded with the Tesla is not really investable given 101 00:04:46,640 --> 00:04:49,640 Speaker 1: the volatility, So what role, if there is a role 102 00:04:49,720 --> 00:04:53,320 Speaker 1: in the larger financial plan doesn't serve well. If there 103 00:04:53,320 --> 00:04:55,800 Speaker 1: were any CFOs who are thinking of following TESTA and 104 00:04:55,960 --> 00:05:00,320 Speaker 1: making it part of their portfolier stronogy right now, they 105 00:05:00,360 --> 00:05:03,000 Speaker 1: certainly are not going to do that given how volatility is. 106 00:05:03,240 --> 00:05:06,400 Speaker 1: So we know it's not a stable short term store 107 00:05:06,400 --> 00:05:09,159 Speaker 1: of value. We know it's not a very good payment 108 00:05:09,200 --> 00:05:11,039 Speaker 1: system at all, because if it's going up and down 109 00:05:11,040 --> 00:05:13,840 Speaker 1: in price, why would you use it for pay for anything. 110 00:05:14,200 --> 00:05:16,640 Speaker 1: So it's probably best considered more like a speculative type 111 00:05:16,640 --> 00:05:19,120 Speaker 1: of security right now, which you know is not the 112 00:05:19,200 --> 00:05:21,880 Speaker 1: end of the world, UM, but that's certainly the way 113 00:05:21,880 --> 00:05:23,920 Speaker 1: that probably investors should be seeing it if they are 114 00:05:23,960 --> 00:05:26,960 Speaker 1: looking at it at the moment. But there's one of 115 00:05:26,960 --> 00:05:29,320 Speaker 1: the very important thing to point out as well, which 116 00:05:29,400 --> 00:05:32,760 Speaker 1: is that when Elon Musk came out and express reservations 117 00:05:32,800 --> 00:05:36,560 Speaker 1: about bitcoin recently, he did so for environmental reasons. That 118 00:05:36,600 --> 00:05:38,839 Speaker 1: shouldn't be a surprise to anyone who's been in this space. 119 00:05:39,080 --> 00:05:41,160 Speaker 1: We had The Financial Times written a lot about this 120 00:05:41,720 --> 00:05:44,279 Speaker 1: um and if that one of our top performing stories, 121 00:05:44,279 --> 00:05:47,680 Speaker 1: as Fleak was a deep dive into the environmental implications 122 00:05:47,760 --> 00:05:51,160 Speaker 1: of bitcoin. There's a lot of activity right now into 123 00:05:51,200 --> 00:05:54,840 Speaker 1: the fintech world um and in environmental groups trying to 124 00:05:54,839 --> 00:05:57,279 Speaker 1: see if they can find a green bitcoin which doesn't 125 00:05:57,320 --> 00:06:01,320 Speaker 1: consume quite so much energy, or rather a green cryptocurrency 126 00:06:01,320 --> 00:06:03,960 Speaker 1: that isn't bitcoin, because probably the answer is gonna lie 127 00:06:04,000 --> 00:06:07,400 Speaker 1: in something other than bitcoin. But again, as people are saying, well, 128 00:06:07,800 --> 00:06:10,120 Speaker 1: I can see down the tracks, there could be an 129 00:06:10,120 --> 00:06:14,240 Speaker 1: investor revolt against dirty bitcoin and people flooding to other 130 00:06:14,360 --> 00:06:19,000 Speaker 1: new occurrencies which are less environmentally damaging. That's creating volatility 131 00:06:19,040 --> 00:06:21,360 Speaker 1: to It leaves us to wonder why Elon Muskar was 132 00:06:21,400 --> 00:06:25,000 Speaker 1: clue very bright didn't read the notes about the green issue. 133 00:06:25,000 --> 00:06:28,880 Speaker 1: Becau say, as you said, so, we've written about it 134 00:06:28,960 --> 00:06:32,320 Speaker 1: so many times, exactly exactly. Thank you so much to 135 00:06:32,400 --> 00:06:34,640 Speaker 1: Jillian Tech of the Financial Times for joining us here 136 00:06:34,680 --> 00:06:39,279 Speaker 1: on Wall Street Week. Coming up, Remaking the media world again, 137 00:06:39,880 --> 00:06:43,159 Speaker 1: this time for streaming. We talked with Discovery president David 138 00:06:43,240 --> 00:06:45,920 Speaker 1: Zaslav about why he thinks this will give him the 139 00:06:46,080 --> 00:06:49,640 Speaker 1: winning hand. That's next on Wall Street Week on Bloomberg. 140 00:06:55,000 --> 00:06:58,960 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 141 00:06:59,080 --> 00:07:03,320 Speaker 1: Bloomberg Radio, The Game of Thrones, and nine Fiance are 142 00:07:03,400 --> 00:07:06,960 Speaker 1: joining a new blended family. For years, Wall Street has 143 00:07:06,960 --> 00:07:08,760 Speaker 1: called on A T and T to give up on 144 00:07:08,839 --> 00:07:11,360 Speaker 1: its media dreams and get more focused on five G. 145 00:07:12,080 --> 00:07:15,640 Speaker 1: This week is succumbed, announcing that CNN and HBO and 146 00:07:15,640 --> 00:07:19,000 Speaker 1: its Warner Media division will leave the Telecommunications Giant and 147 00:07:19,120 --> 00:07:22,560 Speaker 1: joint forces with Discovery, Home of the Food Network, and TLC. 148 00:07:22,960 --> 00:07:26,120 Speaker 1: Here's Chris Polts of Kellner Capital and A T and T. 149 00:07:26,400 --> 00:07:30,400 Speaker 1: In order to roll out their five G platform needs 150 00:07:30,440 --> 00:07:32,600 Speaker 1: a lot of cash, so this is a great way 151 00:07:32,640 --> 00:07:37,280 Speaker 1: for them to monetize the Time Warner assets, probably at 152 00:07:37,280 --> 00:07:39,240 Speaker 1: a loss, but a way to get some cash back 153 00:07:39,320 --> 00:07:41,920 Speaker 1: to continue their roll out. The deal reverses the one 154 00:07:41,920 --> 00:07:44,280 Speaker 1: in which A. T and T paid eighty one billion 155 00:07:44,280 --> 00:07:47,000 Speaker 1: dollars to buy Time Warner, one in which it had 156 00:07:47,040 --> 00:07:49,640 Speaker 1: to fight off a challenge from the Justice Department, and 157 00:07:49,720 --> 00:07:52,000 Speaker 1: it comes after A T and T already beat a 158 00:07:52,000 --> 00:07:57,080 Speaker 1: retreat from its direct TV business selling to TPG. In contrast, 159 00:07:57,240 --> 00:08:01,440 Speaker 1: David Zaslov has been steadily accumulating they haft, including with 160 00:08:01,520 --> 00:08:05,840 Speaker 1: Discoveries two eighteen purchase of Scripts Networks. It is a 161 00:08:05,880 --> 00:08:09,000 Speaker 1: clear concession of defeat for A T and T. It 162 00:08:09,080 --> 00:08:12,800 Speaker 1: just didn't work. They paid too much. That's Craig Moffatt 163 00:08:12,880 --> 00:08:16,240 Speaker 1: of Moffatt Nathanson. The big question is what this will 164 00:08:16,280 --> 00:08:19,240 Speaker 1: mean for the new media behemoth as it competes for 165 00:08:19,280 --> 00:08:22,920 Speaker 1: streaming business against the likes of Disney and Netflix. Both 166 00:08:22,920 --> 00:08:26,640 Speaker 1: Discovery and A T and T have their own streaming platforms, 167 00:08:26,680 --> 00:08:29,920 Speaker 1: but didn't say whether HBO Max and the newly launched 168 00:08:29,920 --> 00:08:33,600 Speaker 1: Discovery Plus would be folded together. I think HBO Max 169 00:08:33,600 --> 00:08:38,640 Speaker 1: has potential to create more value, but A T couldn't wait, 170 00:08:38,880 --> 00:08:40,800 Speaker 1: so I think this this is a really good outcome 171 00:08:40,840 --> 00:08:45,160 Speaker 1: for Discovery. That's Michael Nathanson, also of Moffatt Nathanson. And 172 00:08:45,200 --> 00:08:48,200 Speaker 1: the media dances not over yet. Amazon is looking to 173 00:08:48,200 --> 00:08:51,520 Speaker 1: buy MGM, whose library includes the Rocky and the James 174 00:08:51,520 --> 00:08:56,680 Speaker 1: Bond franchises. The reported acquisition talks signal Amazon's focus on entertainment, 175 00:08:57,160 --> 00:09:00,959 Speaker 1: and analysts speculate whether others like Comcast and Viacom can 176 00:09:01,000 --> 00:09:05,199 Speaker 1: be far behind. Here's Robert Perfusick of Jones Day. The 177 00:09:05,480 --> 00:09:08,280 Speaker 1: M and A market has never been more active than 178 00:09:08,320 --> 00:09:11,360 Speaker 1: it is right now. UM just talk to anyone in 179 00:09:11,400 --> 00:09:13,679 Speaker 1: the space and I think they would say that. We 180 00:09:13,760 --> 00:09:16,280 Speaker 1: talked with the two men who started it all this week, 181 00:09:16,559 --> 00:09:19,160 Speaker 1: Discovery CEO David Zaslof and A T and T CEO 182 00:09:19,280 --> 00:09:22,200 Speaker 1: John Stanky, and for both of them, it is setting 183 00:09:22,200 --> 00:09:24,680 Speaker 1: off on a very new course, quite different from the 184 00:09:24,679 --> 00:09:27,280 Speaker 1: one they've been on. For David Zaslof, it's giving up 185 00:09:27,280 --> 00:09:30,559 Speaker 1: the relatively low cost unscripted programming he's embraced over the 186 00:09:30,640 --> 00:09:33,560 Speaker 1: years and plunging ahead into something very different. And for 187 00:09:33,679 --> 00:09:36,599 Speaker 1: John Stanky, it's turning his back on an A. T 188 00:09:36,760 --> 00:09:40,319 Speaker 1: and T dream to move into the media world. Well first, 189 00:09:40,320 --> 00:09:42,560 Speaker 1: in many ways, we're really in the same business. We're 190 00:09:42,600 --> 00:09:46,000 Speaker 1: both global I P companies, and we've been on a 191 00:09:46,040 --> 00:09:49,880 Speaker 1: mission to aggregate more compelling stories and characters and I 192 00:09:50,000 --> 00:09:51,760 Speaker 1: P in the U S. Which is why we did 193 00:09:51,760 --> 00:09:54,640 Speaker 1: the scripts deal with h G and Food and why 194 00:09:54,679 --> 00:09:56,720 Speaker 1: we got into business with Oprah and Chip and Joe 195 00:09:57,120 --> 00:10:01,040 Speaker 1: and so you know, even though our content maybe less expensive, 196 00:10:01,520 --> 00:10:06,080 Speaker 1: we still aggregate to about viewership depending on any given 197 00:10:06,160 --> 00:10:09,160 Speaker 1: night in the US and outside the US, where the 198 00:10:09,240 --> 00:10:11,800 Speaker 1: leader in sports in Europe with Eurosport, and we have 199 00:10:11,840 --> 00:10:13,880 Speaker 1: free to air channels in a number of markets where 200 00:10:13,880 --> 00:10:17,200 Speaker 1: we're like NBC or CBS, as well as being in 201 00:10:17,240 --> 00:10:21,400 Speaker 1: the in the cable nonfiction business. But John and I 202 00:10:21,600 --> 00:10:25,679 Speaker 1: are really aligned in strategically trying to get to scale 203 00:10:25,840 --> 00:10:30,079 Speaker 1: above the globe, to have to be a meaningful scaled competitor. 204 00:10:30,440 --> 00:10:32,400 Speaker 1: And in order to do that, you need great content 205 00:10:32,480 --> 00:10:35,760 Speaker 1: that people love. And one of the things that we 206 00:10:35,840 --> 00:10:41,280 Speaker 1: looked at we launched Discovery Plus very strong, great product UM, 207 00:10:41,880 --> 00:10:45,600 Speaker 1: great reviews and app and operatings UM and people are 208 00:10:45,679 --> 00:10:48,960 Speaker 1: using the product for three hours a day. And but 209 00:10:49,200 --> 00:10:53,920 Speaker 1: we looked at what John has King Kong, Godzilla, UH, 210 00:10:54,000 --> 00:10:58,040 Speaker 1: the incredible brand of of HBO, Sex in the City, 211 00:10:58,200 --> 00:11:03,600 Speaker 1: Game of Thrones, Superman, Batman, and we we started to 212 00:11:03,600 --> 00:11:06,640 Speaker 1: think about it as a combustible combination. You've got some 213 00:11:06,720 --> 00:11:10,520 Speaker 1: incredible i P that people will pay for before they'll 214 00:11:10,520 --> 00:11:13,280 Speaker 1: pay for dinner, and then we have a bigger library 215 00:11:13,280 --> 00:11:16,760 Speaker 1: than Netflix with content that people love, whether it's Oprah 216 00:11:16,880 --> 00:11:19,800 Speaker 1: or Chip and Joe or Food Network or h G 217 00:11:20,160 --> 00:11:24,600 Speaker 1: or the BBC content Planet Earth. And so I think 218 00:11:24,720 --> 00:11:28,600 Speaker 1: this is just a way that kind of assures that 219 00:11:29,000 --> 00:11:33,480 Speaker 1: Warner probably the top of the pyramid in in in 220 00:11:33,640 --> 00:11:36,840 Speaker 1: quality i P and quality talent that's loved all around 221 00:11:36,880 --> 00:11:39,280 Speaker 1: the world together with the content that we have that 222 00:11:39,440 --> 00:11:42,280 Speaker 1: where we are already the largest global media company, we 223 00:11:42,320 --> 00:11:45,280 Speaker 1: have more global IP than anyone else. And when we 224 00:11:45,400 --> 00:11:49,599 Speaker 1: come together, we think it's just it makes us a 225 00:11:50,320 --> 00:11:54,720 Speaker 1: real formidable global I P business to compete with the 226 00:11:54,720 --> 00:11:57,160 Speaker 1: best in the business. So John David says that you're 227 00:11:57,200 --> 00:11:59,440 Speaker 1: at least in the same sort of business, even if 228 00:11:59,440 --> 00:12:01,439 Speaker 1: they're different ends of the business. But you've also had 229 00:12:01,440 --> 00:12:03,320 Speaker 1: something of a change of heart here. There was a 230 00:12:03,360 --> 00:12:07,200 Speaker 1: major strategic decision made to really move into the media 231 00:12:07,280 --> 00:12:11,080 Speaker 1: business as a telephone company, and now you're really reversing that. 232 00:12:11,160 --> 00:12:12,600 Speaker 1: You're going to go back to your roots to the 233 00:12:12,600 --> 00:12:16,000 Speaker 1: telephone company. Let me understand, looking back at it now, 234 00:12:16,200 --> 00:12:19,240 Speaker 1: was the strategy wrong or did something change in between, 235 00:12:19,280 --> 00:12:21,400 Speaker 1: because let's be frank, you're leaving some money on the table. 236 00:12:21,440 --> 00:12:25,800 Speaker 1: There is some value being destroyed. Well, I probably dispute 237 00:12:25,840 --> 00:12:28,280 Speaker 1: whether or not there's value being destroyed, and actually say 238 00:12:28,280 --> 00:12:31,280 Speaker 1: that we've managed to increase the value of the assets 239 00:12:31,280 --> 00:12:35,000 Speaker 1: we bought by maybe about thirty if you look at 240 00:12:35,040 --> 00:12:37,080 Speaker 1: the cash you've taken out of the business, the assets 241 00:12:37,080 --> 00:12:41,120 Speaker 1: we sold, and the effective value of this transaction, and 242 00:12:41,120 --> 00:12:44,400 Speaker 1: and some reasonable assumptions that once it trades as to 243 00:12:44,440 --> 00:12:47,360 Speaker 1: how it's it's going to trade into multiple John, I 244 00:12:47,400 --> 00:12:48,840 Speaker 1: just want to try to understand that. I think you 245 00:12:48,880 --> 00:12:51,400 Speaker 1: bought it billion dollars. This is forty three billion dollars, 246 00:12:51,400 --> 00:12:54,880 Speaker 1: and you're saying you got that difference out in cash. Well, 247 00:12:54,920 --> 00:12:57,559 Speaker 1: we're getting forty three billion dollars in cash and we're 248 00:12:57,559 --> 00:13:00,720 Speaker 1: getting seventy one of the equity of the new new business. 249 00:13:01,800 --> 00:13:06,319 Speaker 1: So there's two parts to that. And Uh, the the 250 00:13:06,320 --> 00:13:08,200 Speaker 1: point of view that I think I'd have on this 251 00:13:08,280 --> 00:13:10,600 Speaker 1: is the team has done a remarkable job of pivoting 252 00:13:10,640 --> 00:13:13,400 Speaker 1: the asset to be effective in the direct to consumer world. 253 00:13:13,840 --> 00:13:16,240 Speaker 1: And that's really the value that I think David and 254 00:13:16,320 --> 00:13:18,839 Speaker 1: the rest of the industry see it right now. Now, 255 00:13:18,880 --> 00:13:23,199 Speaker 1: what changed since we went into this was originally a 256 00:13:23,360 --> 00:13:26,959 Speaker 1: point of view that this would help our connectivity business, 257 00:13:27,000 --> 00:13:30,280 Speaker 1: and and indeed it has its lower churn, it's helped 258 00:13:30,360 --> 00:13:34,360 Speaker 1: us on customer acquisition on things like selling more broadband connections, 259 00:13:34,800 --> 00:13:38,600 Speaker 1: and it's raised customer satisfaction on those products. But in 260 00:13:38,640 --> 00:13:41,480 Speaker 1: two thousand and sixteen, I don't think we had a 261 00:13:41,480 --> 00:13:44,960 Speaker 1: clear picture of what the global opportunity was going to 262 00:13:45,000 --> 00:13:47,240 Speaker 1: be indirect to consumer and whether or not that was 263 00:13:47,280 --> 00:13:50,160 Speaker 1: going to be essential to play in that space. And 264 00:13:50,200 --> 00:13:53,560 Speaker 1: it's become clear that, as David just described, it's in 265 00:13:53,600 --> 00:13:56,800 Speaker 1: fact going to be global, and the market opportunity for that, 266 00:13:57,000 --> 00:14:01,079 Speaker 1: the value creation opportunity, is significant. It's so much more 267 00:14:01,160 --> 00:14:04,640 Speaker 1: significant than the value that we get back into our 268 00:14:04,679 --> 00:14:08,600 Speaker 1: connectivity business to mets domestically in the United States to 269 00:14:08,720 --> 00:14:11,920 Speaker 1: drive down churn and improve our customer acquisition that I 270 00:14:12,080 --> 00:14:16,000 Speaker 1: can't and good conscience not allow these assets to develop 271 00:14:16,120 --> 00:14:19,440 Speaker 1: their full potential and to give it the kind of 272 00:14:19,600 --> 00:14:22,480 Speaker 1: exposure in the market that it needs to get the 273 00:14:22,560 --> 00:14:24,840 Speaker 1: kind of multiple on it that we just talked about 274 00:14:24,880 --> 00:14:27,880 Speaker 1: that will increase value that the share owners of A 275 00:14:28,000 --> 00:14:31,320 Speaker 1: T and T AT will carry forward. This is the 276 00:14:31,440 --> 00:14:34,160 Speaker 1: right move at this time to actually make that happen, 277 00:14:34,320 --> 00:14:37,160 Speaker 1: given the changes in the environment. That was Discovery CEO 278 00:14:37,400 --> 00:14:41,240 Speaker 1: David Zaslofen a T and T CEO John Stanky coming up. 279 00:14:41,560 --> 00:14:45,040 Speaker 1: Pre Pandemic life is within reach for vaccinating Americans, but 280 00:14:45,200 --> 00:14:48,560 Speaker 1: Dr Anthony Fauci says that a sustained sense of normalcy 281 00:14:48,760 --> 00:14:52,120 Speaker 1: will depend on a global effort. That's next on Wall 282 00:14:52,120 --> 00:15:01,040 Speaker 1: Street Week on Bloomberg This is bloom Burg Wall Street 283 00:15:01,080 --> 00:15:05,160 Speaker 1: Week with David Weston from Bloomberg Radio. Over the last 284 00:15:05,160 --> 00:15:08,800 Speaker 1: fifteen months, the biggest fundamental of all is the path 285 00:15:08,920 --> 00:15:12,480 Speaker 1: of the coronavirus and what it means for the economy. 286 00:15:12,600 --> 00:15:15,600 Speaker 1: Through it all, Dr Anthony Fauci has been our guide, 287 00:15:15,840 --> 00:15:19,120 Speaker 1: and so we asked President Biden's chief medical advisor, where 288 00:15:19,160 --> 00:15:21,640 Speaker 1: we are and whether it's safe to open up our 289 00:15:21,640 --> 00:15:26,160 Speaker 1: economy fully before everyone is vaccinated. Well, David, the more 290 00:15:26,160 --> 00:15:28,600 Speaker 1: and more people that we get vaccinated, the less and 291 00:15:28,680 --> 00:15:31,760 Speaker 1: less likely there's going to be another wave. The wild 292 00:15:31,800 --> 00:15:36,040 Speaker 1: card positive wild card we have now that we did 293 00:15:36,080 --> 00:15:40,680 Speaker 1: not have when we experienced the three big surges that 294 00:15:40,760 --> 00:15:44,680 Speaker 1: our country has experienced. The most difficult one was at 295 00:15:44,720 --> 00:15:47,840 Speaker 1: the end of the full and early winter, as we 296 00:15:47,880 --> 00:15:53,280 Speaker 1: transition from one where we went up to a terribly 297 00:15:53,400 --> 00:15:56,800 Speaker 1: high level of three thousand cases a day in three 298 00:15:56,800 --> 00:16:00,560 Speaker 1: thousand deaths. We are now coming down in a rather 299 00:16:00,720 --> 00:16:05,880 Speaker 1: significant manner that we've dropped cases from sixty thousand a 300 00:16:05,960 --> 00:16:09,240 Speaker 1: day two down to fifty forty and now we're in 301 00:16:09,280 --> 00:16:12,600 Speaker 1: the thirties, which is really good news. We don't want 302 00:16:12,600 --> 00:16:16,800 Speaker 1: to declare victory prematurely, but if we can get the 303 00:16:18,480 --> 00:16:22,080 Speaker 1: of adults vaccinated with at least one dose by the 304 00:16:22,120 --> 00:16:24,680 Speaker 1: fourth of July, the way the President has set the goal, 305 00:16:25,440 --> 00:16:28,720 Speaker 1: I think the chances of there being a surge or 306 00:16:28,760 --> 00:16:33,040 Speaker 1: a rebound is extremely low. That's the reason why we 307 00:16:33,120 --> 00:16:36,720 Speaker 1: want to continue to get people vaccinated and even get 308 00:16:36,760 --> 00:16:40,520 Speaker 1: to that somewhat recalcitran group that really doesn't want to 309 00:16:40,520 --> 00:16:44,120 Speaker 1: get vaccinated, because the more and more we get, the 310 00:16:44,200 --> 00:16:47,400 Speaker 1: higher the percentage, the less likely there'll be a problem. 311 00:16:47,480 --> 00:16:51,520 Speaker 1: And that would mean we could safely get back to normal, 312 00:16:51,840 --> 00:16:54,080 Speaker 1: get the economy back to where we want to get 313 00:16:54,120 --> 00:16:57,760 Speaker 1: people enjoying things that they have not had the opportunity 314 00:16:57,800 --> 00:17:01,160 Speaker 1: to enjoy now for well over year. So we're going 315 00:17:01,160 --> 00:17:04,119 Speaker 1: in that direction, but we've got to keep putting on 316 00:17:04,480 --> 00:17:08,080 Speaker 1: the pressure, as it were, to continue to get people vaccinated. 317 00:17:08,280 --> 00:17:11,159 Speaker 1: Let's talk about the role of social distancing mask wearing 318 00:17:11,320 --> 00:17:14,080 Speaker 1: some of the guidelines we had in getting those numbers 319 00:17:14,080 --> 00:17:16,919 Speaker 1: back down Unite states as opposed to the vaccines to 320 00:17:17,040 --> 00:17:19,080 Speaker 1: what extent was at the social distance in the maxim. 321 00:17:19,240 --> 00:17:21,920 Speaker 1: Let's be honest, there's some confusion around the country now 322 00:17:21,960 --> 00:17:25,320 Speaker 1: about masks. Yeah, I think the confusion is and and 323 00:17:25,359 --> 00:17:28,920 Speaker 1: we've been discussing this over the past couple of days, David, 324 00:17:29,000 --> 00:17:35,280 Speaker 1: is an understandable confusion the as the data accumulated as 325 00:17:35,359 --> 00:17:40,920 Speaker 1: to the effectiveness, the real world effectiveness in vaccines in 326 00:17:41,080 --> 00:17:44,600 Speaker 1: protecting you from getting infected, and even if you get 327 00:17:44,640 --> 00:17:48,119 Speaker 1: a breakthrough infected, of preventing you from spreading it to 328 00:17:48,200 --> 00:17:52,840 Speaker 1: anyone else. There was strong suggestions that that was the case. 329 00:17:53,040 --> 00:17:56,800 Speaker 1: Over the last several weeks to a month, the data 330 00:17:56,840 --> 00:18:00,080 Speaker 1: would become very clear that if you're fully vaccinated and 331 00:18:00,160 --> 00:18:04,080 Speaker 1: an otherwise healthy person, the chances of your getting infected 332 00:18:04,160 --> 00:18:08,240 Speaker 1: is remarkably low, really quite low. It's good against the 333 00:18:08,359 --> 00:18:12,040 Speaker 1: variance number two and number three. Even if you do 334 00:18:12,119 --> 00:18:14,719 Speaker 1: get a breakthrough infect that the level of virus in 335 00:18:14,720 --> 00:18:18,439 Speaker 1: your nasal firynx would be low enough that it is 336 00:18:18,480 --> 00:18:22,560 Speaker 1: extremely unlikely that you would affect anyone else. Having said that, 337 00:18:23,160 --> 00:18:26,600 Speaker 1: and documenting that, the CDC came out with guidance a 338 00:18:26,600 --> 00:18:29,400 Speaker 1: few days ago last week and said, if you are 339 00:18:29,480 --> 00:18:33,919 Speaker 1: fully vaccinated, you should feel safe that you can go 340 00:18:34,000 --> 00:18:39,200 Speaker 1: without a mask, not only outdoors but also indoors. That 341 00:18:39,359 --> 00:18:43,639 Speaker 1: was directed specifically at people who were fully vaccinated. The 342 00:18:43,760 --> 00:18:47,720 Speaker 1: problem is, David, that would happened is that people interpreted 343 00:18:48,200 --> 00:18:50,200 Speaker 1: that that was a signal to say that you don't 344 00:18:50,240 --> 00:18:54,159 Speaker 1: need masks anymore, which absolutely is not the case, because 345 00:18:54,200 --> 00:18:58,720 Speaker 1: for people who are not vaccinated and still vulnerable and 346 00:18:58,800 --> 00:19:02,320 Speaker 1: susceptible to infect action, that you still have to follow 347 00:19:02,359 --> 00:19:06,840 Speaker 1: the CDC guidelines that have not at all changed for 348 00:19:06,920 --> 00:19:11,280 Speaker 1: that group, And that's where the confusion is. It replies 349 00:19:11,480 --> 00:19:16,080 Speaker 1: only to people who are fully vaccinated. A doctor clearly 350 00:19:16,119 --> 00:19:18,280 Speaker 1: it applies only those fully vaccinated, and those are who 351 00:19:18,320 --> 00:19:21,040 Speaker 1: are fully vaccine and feel privileged to have that. But 352 00:19:21,160 --> 00:19:23,240 Speaker 1: we don't know who's fully vaccinated. So if I'm running 353 00:19:23,280 --> 00:19:26,119 Speaker 1: a business, whether it's a small retail show store or 354 00:19:26,160 --> 00:19:29,160 Speaker 1: it's a huge company, I don't necessarily know who's vaccinated 355 00:19:29,200 --> 00:19:33,919 Speaker 1: and who's not. How do I figure out which is what? Well, David, 356 00:19:33,960 --> 00:19:35,720 Speaker 1: you just hit the nail right on the head of 357 00:19:35,760 --> 00:19:40,440 Speaker 1: what the issue is. Since we are not centrally requiring 358 00:19:40,600 --> 00:19:45,320 Speaker 1: proof of vaccinations, namely from the federal government on down, 359 00:19:46,240 --> 00:19:49,480 Speaker 1: you gave an example which is a perfect example of 360 00:19:49,560 --> 00:19:52,720 Speaker 1: what we're facing. So let's say I'm an owner of 361 00:19:52,760 --> 00:19:57,400 Speaker 1: an establishment, whatever that establishment is, and I am aware 362 00:19:57,520 --> 00:20:00,720 Speaker 1: of the CDC guidelines saying that if people who have 363 00:20:00,800 --> 00:20:05,000 Speaker 1: vaccinated can feel safe outdoors and indoors without a mask. 364 00:20:05,240 --> 00:20:09,240 Speaker 1: What I don't know is coming into my establishment, who's 365 00:20:09,280 --> 00:20:13,520 Speaker 1: vaccinated news not, which means you don't know who's infected 366 00:20:13,720 --> 00:20:16,879 Speaker 1: and who's not, and what the risk of transmitting and 367 00:20:17,000 --> 00:20:21,879 Speaker 1: infection within my establishment. And it's for that reason why 368 00:20:22,000 --> 00:20:25,960 Speaker 1: there are some establishment owners and people responsible for the establishment. Know. 369 00:20:26,080 --> 00:20:30,400 Speaker 1: We're saying, full understanding the CDC guidelines, if you want 370 00:20:30,400 --> 00:20:34,240 Speaker 1: to come into my establishment, you have to wear a mask. 371 00:20:34,760 --> 00:20:37,280 Speaker 1: And that's where some of the confusion is, David, because 372 00:20:37,280 --> 00:20:39,959 Speaker 1: she's saying, wait a minute, the CDC is saying that 373 00:20:40,000 --> 00:20:42,119 Speaker 1: if you have vaccinated, you don't have to wear a mask, 374 00:20:42,520 --> 00:20:44,520 Speaker 1: and now you're telling me I have to wear a 375 00:20:44,640 --> 00:20:47,520 Speaker 1: mask if I come into your That's something that needs 376 00:20:47,560 --> 00:20:50,359 Speaker 1: to be cleared up for sure. That was President Biden's 377 00:20:50,400 --> 00:20:54,040 Speaker 1: chief medical advisor, Dr Anthony Fauci. Coming up. We wrap 378 00:20:54,119 --> 00:20:56,720 Speaker 1: up the week as always with our special contributor Larry 379 00:20:56,720 --> 00:21:00,720 Speaker 1: Summers of Harvard. That's next on Wall Street Week on Bloomberg. 380 00:21:06,080 --> 00:21:10,040 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 381 00:21:10,160 --> 00:21:12,879 Speaker 1: Bloomberg Radio. We're gonna wrap up the week as we 382 00:21:12,960 --> 00:21:15,720 Speaker 1: always do with our special contributing to Larry Summers at Harvard. So, Larry, 383 00:21:15,760 --> 00:21:18,280 Speaker 1: I want to get to the Summer's inflation watch we 384 00:21:18,320 --> 00:21:20,640 Speaker 1: premiered last week. But before we do that, we got 385 00:21:20,640 --> 00:21:22,760 Speaker 1: to talk about crypto for a moment or two, because boy, 386 00:21:22,760 --> 00:21:25,280 Speaker 1: bitcoin took us on a wild ride this week. And 387 00:21:25,600 --> 00:21:28,440 Speaker 1: let me ask the first and worst basic question. Doesn't matter? 388 00:21:28,520 --> 00:21:30,520 Speaker 1: I mean, you have said on this program you think 389 00:21:30,800 --> 00:21:33,880 Speaker 1: cryptocurrency is here to stay. Why is it here to stay? 390 00:21:33,880 --> 00:21:36,160 Speaker 1: And what does it do for us? Look? Does it 391 00:21:36,240 --> 00:21:39,320 Speaker 1: matter to the overall economy? Does it matter to the 392 00:21:39,359 --> 00:21:45,240 Speaker 1: growth of standard of livings of Americans? Is it as 393 00:21:45,440 --> 00:21:48,359 Speaker 1: important issue an issue as it is an issue that 394 00:21:48,400 --> 00:21:53,959 Speaker 1: attracts media attention. No to all of those questions. Is 395 00:21:53,960 --> 00:21:58,840 Speaker 1: there a desire and is there a longstanding human desire 396 00:21:59,440 --> 00:22:04,600 Speaker 1: to hold olden asset that feels separate and apart from 397 00:22:04,600 --> 00:22:07,840 Speaker 1: the day to day workings of governments. I think the 398 00:22:07,880 --> 00:22:12,000 Speaker 1: answer to that question history shows is yes. I think 399 00:22:12,040 --> 00:22:16,920 Speaker 1: gold has been the primary asset of that kind for 400 00:22:16,960 --> 00:22:21,000 Speaker 1: a long time. And I think that crypto has a 401 00:22:21,119 --> 00:22:26,280 Speaker 1: chance of becoming an agreed form that people who are 402 00:22:26,280 --> 00:22:32,000 Speaker 1: looking for safety hold wealth. Uh In So my guess 403 00:22:32,119 --> 00:22:37,560 Speaker 1: is that Crypto is here to stay, and probably here 404 00:22:37,560 --> 00:22:41,120 Speaker 1: to stay as a kind of digital goal. And if 405 00:22:41,160 --> 00:22:46,800 Speaker 1: you imagine that crypto became half or even a third 406 00:22:47,080 --> 00:22:53,680 Speaker 1: of the total value of the non use value of gold, 407 00:22:53,920 --> 00:22:59,800 Speaker 1: that would be a substantial appreciation from current levels. And 408 00:22:59,800 --> 00:23:03,800 Speaker 1: that's why I think there's a good prospect, uh that 409 00:23:03,920 --> 00:23:07,520 Speaker 1: crypto will be part of the system for quite a 410 00:23:07,560 --> 00:23:12,280 Speaker 1: while to come. But is crypto gonna usher in some 411 00:23:12,359 --> 00:23:15,800 Speaker 1: kind of libertarian paradise? Are most of us going to 412 00:23:15,880 --> 00:23:20,359 Speaker 1: be making most of our payments using bitcoin or some 413 00:23:20,520 --> 00:23:25,320 Speaker 1: other uh crypto asset? I rather doubt it. Is this 414 00:23:25,400 --> 00:23:30,320 Speaker 1: gonna be something fundamental for commerce on the internet. It 415 00:23:30,400 --> 00:23:35,800 Speaker 1: may be an important part of commerce on uh the internet. Uh, 416 00:23:36,160 --> 00:23:40,159 Speaker 1: that's how I would uh think about it. Another thing 417 00:23:40,200 --> 00:23:43,160 Speaker 1: that happened this week, before we get to inflation as such, 418 00:23:43,680 --> 00:23:46,200 Speaker 1: is a Janet yell on this Treasure Secretary went into 419 00:23:46,240 --> 00:23:47,560 Speaker 1: the belly of the beast, if I can put that 420 00:23:47,600 --> 00:23:49,600 Speaker 1: with the US Chamber of Commerce and said, you should 421 00:23:49,640 --> 00:23:52,160 Speaker 1: be in favor of our plan that really has US 422 00:23:52,160 --> 00:23:55,120 Speaker 1: tax and corporations more. And that's because you're actually gonna 423 00:23:55,160 --> 00:23:58,240 Speaker 1: make more money because the overall investments were making and 424 00:23:58,320 --> 00:24:00,960 Speaker 1: you have a fascinating point about that, because we've also 425 00:24:01,000 --> 00:24:03,240 Speaker 1: heard from President Biden he's trying to redistribute some of 426 00:24:03,240 --> 00:24:05,240 Speaker 1: the wealth. You can't have both ways, can you. I 427 00:24:05,240 --> 00:24:07,960 Speaker 1: think the most important thing to say is that the 428 00:24:08,000 --> 00:24:12,520 Speaker 1: administration is in broadly the right direction on corporate taxation. 429 00:24:13,200 --> 00:24:17,240 Speaker 1: Corporations can afford to pay more, and instead of having 430 00:24:17,240 --> 00:24:20,880 Speaker 1: a race to the bottom globally, we should be cooperating 431 00:24:20,920 --> 00:24:25,879 Speaker 1: to make sure that people can't use havens to avoid taxes. 432 00:24:25,960 --> 00:24:29,880 Speaker 1: And Secretary Yelling is right in the direction of her policy. 433 00:24:30,440 --> 00:24:33,879 Speaker 1: Secretary Yelling is right, and I found it a powerful 434 00:24:34,000 --> 00:24:38,960 Speaker 1: speech in her emphasis on there's a lot more that 435 00:24:39,280 --> 00:24:43,199 Speaker 1: government needs to do UH in our society and that 436 00:24:43,640 --> 00:24:48,719 Speaker 1: fundamentally we need to rebalance a bit towards UH public investment, 437 00:24:48,840 --> 00:24:51,960 Speaker 1: and maybe even more than a bit, given the magnitude 438 00:24:51,960 --> 00:24:57,600 Speaker 1: of climate and health and inequality challenges. I don't, in 439 00:24:57,680 --> 00:25:02,040 Speaker 1: all honesty think that a claim that somehow an increase 440 00:25:02,119 --> 00:25:06,119 Speaker 1: in corporate taxes will be good for corporate profits is 441 00:25:06,160 --> 00:25:10,240 Speaker 1: a valid UH claim, and I was surprised and all 442 00:25:10,359 --> 00:25:16,360 Speaker 1: disappointed UH to see UH that claim made. But the 443 00:25:16,560 --> 00:25:20,720 Speaker 1: argument that it was supporting is I think a valid 444 00:25:20,800 --> 00:25:28,119 Speaker 1: and strong UH argument, and uh, that's probably uh where 445 00:25:28,160 --> 00:25:31,040 Speaker 1: the focus should be. Let me make a broader point 446 00:25:31,080 --> 00:25:33,040 Speaker 1: or really a question for you, Larry. Here, we have 447 00:25:33,160 --> 00:25:38,480 Speaker 1: seen in recent years an increasing concentration uh in US corporations, 448 00:25:38,560 --> 00:25:41,360 Speaker 1: Larger and larger corporations, large and larger market shares, and yes, 449 00:25:41,600 --> 00:25:45,560 Speaker 1: much much larger profitability rates. As a matter of economics, 450 00:25:45,560 --> 00:25:48,520 Speaker 1: not morality. Economics, is that good or bad or neutral 451 00:25:48,560 --> 00:25:51,359 Speaker 1: for the economy? You know, David, It depends. If a 452 00:25:51,440 --> 00:25:55,920 Speaker 1: company comes to have lots of market power because it 453 00:25:55,960 --> 00:25:58,639 Speaker 1: gets better and better at producing, and it can produce 454 00:25:58,720 --> 00:26:01,679 Speaker 1: at lower and lower call us, that's good. That's what 455 00:26:01,720 --> 00:26:05,840 Speaker 1: we call progress. That's what Henry Ford did with automobiles 456 00:26:06,240 --> 00:26:09,719 Speaker 1: a long time ago. If a company is buying up 457 00:26:09,760 --> 00:26:13,919 Speaker 1: its rivals, if a company is creating a fear that 458 00:26:14,160 --> 00:26:18,640 Speaker 1: anyone who tries to innovate they'll just get crushed, copied 459 00:26:18,640 --> 00:26:23,679 Speaker 1: and crushed, that's really terrible for progress in the economy. 460 00:26:23,760 --> 00:26:27,280 Speaker 1: And so I don't think you can generalize. I certainly 461 00:26:27,840 --> 00:26:33,000 Speaker 1: share the view that we certainly haven't been making mistakes 462 00:26:33,440 --> 00:26:38,160 Speaker 1: of too uh too much antitrust policy in the United 463 00:26:38,200 --> 00:26:41,160 Speaker 1: States over the last generation. And I think we can 464 00:26:41,280 --> 00:26:46,280 Speaker 1: usefully look at stepped up antitrust policies in some cases. 465 00:26:46,760 --> 00:26:52,159 Speaker 1: But I don't agree with those um who who seemed 466 00:26:52,200 --> 00:26:55,000 Speaker 1: to be suggesting and I may be misreading some of 467 00:26:55,000 --> 00:26:59,440 Speaker 1: the things that UH some of the people UH providing 468 00:26:59,480 --> 00:27:03,400 Speaker 1: common arey say. If they're saying that whenever a company 469 00:27:03,440 --> 00:27:06,679 Speaker 1: gets a larger market share and more profits, that's a 470 00:27:06,760 --> 00:27:09,920 Speaker 1: problem that the government should go after, I think that's 471 00:27:09,960 --> 00:27:13,600 Speaker 1: badly wrong. That's the situation the government should look at 472 00:27:14,000 --> 00:27:18,360 Speaker 1: to see whether the competitive practices have been fair. Lord, 473 00:27:18,440 --> 00:27:21,080 Speaker 1: let's get to the summer's inflation watch, as we call 474 00:27:21,119 --> 00:27:23,239 Speaker 1: it here. This is something you've been talking about right 475 00:27:23,280 --> 00:27:27,080 Speaker 1: from the very beginning of President Biden's administration, and concern 476 00:27:27,119 --> 00:27:28,960 Speaker 1: that we might be pumping too much money to the economy. 477 00:27:29,240 --> 00:27:32,080 Speaker 1: What's happened last week on that front? From your perspective, 478 00:27:32,119 --> 00:27:34,800 Speaker 1: what are you looking at? You know, market judgments have 479 00:27:34,920 --> 00:27:37,600 Speaker 1: stayed about constant. I think if you look at the 480 00:27:37,720 --> 00:27:43,680 Speaker 1: run of commentary, there's a greater awareness of it. Uh. 481 00:27:43,720 --> 00:27:47,960 Speaker 1: I read the fat is being at the fringes at 482 00:27:47,960 --> 00:27:53,359 Speaker 1: the edges of UH growing awareness. UH. I don't think 483 00:27:53,440 --> 00:27:58,320 Speaker 1: the FED is projecting in a way that reflects the 484 00:27:58,359 --> 00:28:02,560 Speaker 1: potential seriousness of the problem. And I think that you know, 485 00:28:02,800 --> 00:28:09,440 Speaker 1: stopping on slowing and inflationary economies. Inflation is a lot 486 00:28:09,520 --> 00:28:12,639 Speaker 1: like bringing a car to a stop. It's gonna be 487 00:28:12,720 --> 00:28:16,840 Speaker 1: much more comfortable if you start early and gently then 488 00:28:16,880 --> 00:28:20,080 Speaker 1: if you wait until the last possible moment. And so 489 00:28:20,520 --> 00:28:25,800 Speaker 1: I am concerned that with everything that's UH going on 490 00:28:26,440 --> 00:28:31,440 Speaker 1: the economy, maybe a bit charging towards UH, towards towards 491 00:28:31,480 --> 00:28:35,360 Speaker 1: the wall. So I but I would say, I'm not 492 00:28:36,119 --> 00:28:39,960 Speaker 1: what's more concerned. We're lots less concerned than I was 493 00:28:40,000 --> 00:28:41,880 Speaker 1: a week ago. And we're starting to hear from only 494 00:28:41,960 --> 00:28:44,880 Speaker 1: some of the FED members some concern. You heard from 495 00:28:44,920 --> 00:28:47,480 Speaker 1: for example, Capital this week saying, this time, start easing 496 00:28:47,480 --> 00:28:49,320 Speaker 1: our foot off the accelerator so we don't have to 497 00:28:49,400 --> 00:28:51,920 Speaker 1: jump too hard in the break if that time comes. 498 00:28:52,120 --> 00:28:54,080 Speaker 1: But one of my questions is is it is it 499 00:28:54,200 --> 00:28:56,920 Speaker 1: more than just they're sort of not paying attention, they're 500 00:28:56,960 --> 00:28:59,320 Speaker 1: not acting quick enough, or could they be contributing the 501 00:28:59,320 --> 00:29:03,520 Speaker 1: problem through expectations by signaling so strongly they're not gonna 502 00:29:03,640 --> 00:29:08,560 Speaker 1: actually taper. Does that potentially actually feed the beast of inflation? Look, 503 00:29:08,600 --> 00:29:11,560 Speaker 1: I think it's a broad point. You have the FED 504 00:29:11,760 --> 00:29:13,840 Speaker 1: saying that it's a whole new world and we're a 505 00:29:13,840 --> 00:29:19,040 Speaker 1: whole new FED. You have the government saying it's a 506 00:29:19,080 --> 00:29:23,320 Speaker 1: whole new type of policy back to the Great Society 507 00:29:23,480 --> 00:29:26,640 Speaker 1: or the New Deal. If you tell people it's a 508 00:29:26,640 --> 00:29:30,160 Speaker 1: new world, they're probably gonna be more reluctant to form 509 00:29:30,240 --> 00:29:34,280 Speaker 1: expectations based on the old world. And so I don't 510 00:29:34,360 --> 00:29:39,920 Speaker 1: understand how people can argue both that expectations are fundamentally 511 00:29:39,960 --> 00:29:44,040 Speaker 1: anchored and that it's a new world. And so I 512 00:29:44,040 --> 00:29:47,760 Speaker 1: think a little bit more emphasis on continuity would be 513 00:29:47,800 --> 00:29:54,160 Speaker 1: a good idea. I think the FED needs to recognize, uh, 514 00:29:54,320 --> 00:29:58,080 Speaker 1: that it needs to be looking forward and driving the 515 00:29:58,160 --> 00:30:02,800 Speaker 1: car through the windshield rather than uh, the side windows. 516 00:30:03,280 --> 00:30:05,720 Speaker 1: Looking at the side windows might have been fine a 517 00:30:05,800 --> 00:30:08,520 Speaker 1: year or so, a year ago or two years ago 518 00:30:08,640 --> 00:30:12,720 Speaker 1: when they put forward their framework, but when you've got 519 00:30:12,720 --> 00:30:17,400 Speaker 1: a government that's committing itself to fifteen percent of GDP 520 00:30:17,520 --> 00:30:21,280 Speaker 1: and fiscal stimulus, when the economy has a record level 521 00:30:21,280 --> 00:30:24,920 Speaker 1: of job vacancies, that's not a time when you can 522 00:30:25,000 --> 00:30:29,880 Speaker 1: steer the economy through the side window. So, Larry, who 523 00:30:29,880 --> 00:30:32,480 Speaker 1: are watching fits so so closely for so many years, 524 00:30:32,480 --> 00:30:34,680 Speaker 1: just in the final ten or fifteen seconds here do 525 00:30:34,720 --> 00:30:37,160 Speaker 1: you think they're starting to change their direction? I hope so. 526 00:30:37,320 --> 00:30:40,200 Speaker 1: Thank you so much to our special continuing Larry Summers 527 00:30:40,360 --> 00:30:43,640 Speaker 1: of Harvard for that review of the week. Finally, one 528 00:30:43,680 --> 00:30:47,400 Speaker 1: more thought, would you like some pepperoni and extra cheese 529 00:30:47,520 --> 00:30:51,720 Speaker 1: with your bitcoin? The friends and foes of bitcoin had 530 00:30:51,760 --> 00:30:54,840 Speaker 1: another week of slugging it out with the friends of 531 00:30:54,840 --> 00:30:57,720 Speaker 1: the currency or whatever it is, sticking to their guns, 532 00:30:57,720 --> 00:31:00,080 Speaker 1: and people like Kath they would have arc particularly it 533 00:31:00,120 --> 00:31:02,920 Speaker 1: will go to five hundred thousand dollars even as it 534 00:31:03,040 --> 00:31:06,880 Speaker 1: slid in a single morning. We go through soul searching 535 00:31:06,920 --> 00:31:09,560 Speaker 1: times like this and and scrape the models, and yes, 536 00:31:09,600 --> 00:31:12,360 Speaker 1: our conviction is as high. But there are those who 537 00:31:12,440 --> 00:31:15,160 Speaker 1: say we're missing the whole story, that it's not the 538 00:31:15,200 --> 00:31:18,280 Speaker 1: crypto that matters, but the blockchain on which it's built 539 00:31:18,360 --> 00:31:22,000 Speaker 1: and what that could make possible, everything from letting people 540 00:31:22,120 --> 00:31:25,040 Speaker 1: lend and borrow without the need for a pesky bank 541 00:31:25,440 --> 00:31:29,480 Speaker 1: to replacing the Swift payment system altogether. But now there's 542 00:31:29,520 --> 00:31:32,800 Speaker 1: a new entrant into the race for creative uses of crypto, 543 00:31:33,040 --> 00:31:36,360 Speaker 1: the pizza franchise. The Financial Times this week tells the 544 00:31:36,360 --> 00:31:40,600 Speaker 1: story of Bitcoin Pizza, a creation of Anthony pomp Pompiliano, 545 00:31:41,000 --> 00:31:44,120 Speaker 1: a crypto influencer and tech investor who has decided to 546 00:31:44,240 --> 00:31:48,920 Speaker 1: merge two things. He loves, bitcoin and pizza. The pizza 547 00:31:49,040 --> 00:31:52,600 Speaker 1: is real and is sourced from your local pizzeria, with 548 00:31:53,560 --> 00:31:56,960 Speaker 1: the profits going to something called the Human Rights Foundation 549 00:31:57,040 --> 00:32:01,440 Speaker 1: Bitcoin Developers Fund, which, according to a website, is raising 550 00:32:01,480 --> 00:32:05,360 Speaker 1: money to support open source software developers working to strengthen 551 00:32:05,400 --> 00:32:08,640 Speaker 1: bitcoin so it can be used by human rights activists 552 00:32:08,720 --> 00:32:11,400 Speaker 1: all around the world. And no, I am not making 553 00:32:11,400 --> 00:32:14,800 Speaker 1: this up, but there is one catch. You may be 554 00:32:14,840 --> 00:32:18,080 Speaker 1: able to get your pizza may help fund bitcoin developers 555 00:32:18,120 --> 00:32:20,520 Speaker 1: trying to save the world, but the one thing you 556 00:32:20,600 --> 00:32:24,560 Speaker 1: can't do is pay for that pizza using bitcoin. Now, 557 00:32:24,760 --> 00:32:28,320 Speaker 1: when it comes to getting pizza, bitcoin pizza only takes dollars, 558 00:32:28,960 --> 00:32:31,320 Speaker 1: though you can use your credit card if you want. 559 00:32:31,800 --> 00:32:33,760 Speaker 1: That does it. For this episode of Wall Street Week, 560 00:32:33,880 --> 00:32:36,920 Speaker 1: I'm David Weston. This is Bloomberg. See you next week.